Premier obtains deferral for covenant test

Premier Foods has announced that it has obtained an agreement from its banking syndicate to defer the group’s forthcoming financial covenant test from 31 December 2011 to 31 March 2012.

The firm, which owns brands such as Hovis and Mr Kipling, said the agreement formed part of its discussions about the longer-term refinancing of the group’s debt, and said it confirmed ongoing support from the bank for its business.

Michael Clarke, chief executive officer, said: “In recent weeks, we have set out our priorities and made significant leadership changes to strengthen our focus. We are now moving quickly to finalise our detailed growth plans to ensure we continue to build momentum in the business.”

He added: “This is an important step towards securing a longer-term financial foundation for the business.”

In October this year, Premier announced it was in “constructive discussions” with its banks on the possibility of putting in place refinancing facilities beyond their current maturity of December 2013.

“These discussions continue to be constructive and the banking syndicate has confirmed that it remains supportive both of the business and the continued discussions,” said the firm.